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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, SANDEEP N. BHATT, JJ.
Rajai Motors (A Partnership Firm) – Petitioner
Versus
State Of Gujarat – Respondent
R/Special Civil Application No. 4099 Of 2022
Decided On : 01-02-2023
VAT Tribunal - Challenge to Pre-deposit Order - Gujarat Value Added Tax Act, 2003, Central Sales Tax Act, 1956 - Section 34(2), Section 73(4) - The court quashed the order of the VAT Tribunal directing pre-deposit of Rs. 7.12 Crore, considering the property attachment and the amount already deposited at the First Appellate Authority. The court directed the completion of the pending Second Appeal within three months and instructed the State to create a charge on the property with a lien of the Bank.
Fact of the Case:
The petitioner challenged the order of the Gujarat Value Added Tax Tribunal, which directed a pre-deposit of tax of Rs. 7,12,00,000 based on an ex-parte Assessment Order for the Assessment year 2015-16. The petitioner contended that the assessment was based on assumption and presumption and lacked factual basis.
Finding of the Court:
The court quashed the order of the VAT Tribunal, considering the property attachment and the amount already deposited at the First Appellate Authority. It directed the completion of the pending Second Appeal within three months and instructed the State to create a charge on the property with a lien of the Bank.
Issues: Challenge to pre-deposit order, validity of assessment based on assumption and presumption, property attachment, pending Second Appeal
Ratio Decidendi: The court considered the property attachment and the amount already deposited at the First Appellate Authority in quashing the pre-deposit order. It emphasized the need for completion of the pending Second Appeal and instructed the State to create a charge on the property with a lien of the Bank.
Final Decision: The court allowed the petition, retained the amount already deposited, directed the completion of the pending Second Appeal within three months, and instructed the State to create a charge on the property with a lien of the Bank.
ORDER :
(Sonia Gokani, J.)
1. The petitioner herein is challenging the order dated 17.01.2022 passed by the Gujarat Value Added Tax Tribunal, whereby it ordered the pre-deposit of tax of Rs. 7,12,00,000/- on the basis of the Revision order in Revision Application No. 44 of 2021 and in the matter of Second Appeal No. 579 of 2021.
2. The Tribunal, infact, had decided the Revision Petition at an interim stage and issued the direction to pay such a huge amount within a period of one month. The petitioner is aggrieved by the fact that it has a good case on merit and the orders of the Assessing Officer and the First Appellate Authority are based on assumption and presumption and lacks the factual basis.
3. The petitioner is a registered dealer under the Gujarat Value Added Tax Act, 2003 (‘the VAT Act’ hereinafter) and Central Sales Tax Act, 1956 (‘the CST Act’ hereinafter). The petitioner is engaged in the business of reselling motor cycles, scooter and their parts as well as having the service station of the two wheelers. The present petition concerns the Assessment year 2015-16. The purchases and the sales made by the petitioner were admitted in returns filed under the VAT Act and the CST Act.
3.1 The ex-parte Assessment Order passed by the Assistant Commissioner of State Tax, Godhara, Unit:-46, Panchmahal on 18.03.2020 for the Financial Year 2015-16.
3.2 The Assessing Authority issued notice for Assessment under section 34(2) of the VAT Act and the CST Act. The petitioner remained present and the adjournment was sought as there were serious medical issues on the date of hearing. Adjournment though was requested due to various personal circumstances however, the Assessing Officer was in a hurry to complete the assessment and the ex-parte order was passed on 18.03.2020, where it had not accepted the sales as per audited balance sheet received by him from the Income Tax Department and has taken the base of purchases made against the Form ‘C’, from the online data available on the commercial tax website. It also considered the same to be suppressed purchases without providing data and details. It eventually worked out the total sales at Rs. 70,01,58,500/- instead of Rs. 32,81,95,465/- and imposed the tax @ 15% of the turnover which was followed by demand of tax, interest and penalty.
3.3 The challenge was made before the Deputy Commissioner (Appeals) who granted the stay against the recovery of deposit by deposit of partial amount of Rs. 30,75,000/- against the total demand and the stay was granted.
3.4 The said authority canceled the stay order and passed a fresh order on 12.07.2021 and directed to pay the balance sum of total demanded amount of Rs. 26,20,35,862/-. The First Appellate Authority issued notice on 23.08.2021 in Form 503 and sought to revise the assessment. The Revision order was passed on 24.08.2021 and the total demand was enhanced to Rs.31,36,62,495/- and ordered the Assessing Authority to initiate recovery proceedings.
3.5 Thereafter, Second Appeal No. 579 of 2021 was preferred and the Revision Application No.44 of 2021 was preferred. The respondent authority initiated the recovery proceedings against the petitioner and hence, the petitioner made representation. The properties of the petitioner were attached by the respondent authorities and secured by assets worth approximately Rs. 61 Crore.
3.6 The VAT Tribunal passed an order on 17.01.2022 and directed the full amount of tax of Rs.7.12 Crore as a condition of pre-deposit to be payable within a period of one month on or before 28.02.2022.
3.7 The grievance on the part of the petitioner is that the VAT Tribunal decided the entire Revision Application and the Second Appeal at the pre-deposit stage of hearing. It adjudicated and decided that the petitioner had collected tax and not paid the Government Authority. The assessment by the Assessing Officer has been done ex-
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